Technology and innovation: enough to make countries prosperous?

Daron Acemoglu, professor of economic policy at MIT, is one of the gurus and leading voices that best explains the evolution of countries and the relationship between social systems and technological advances.

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Félix Hernández

Félix Hernández Rojas

Reading time: 3 min

In ‘Why countries fail’ (2012), Daron Acemoglu and James A. Robinson explain in a roundabout way why democracy leads to shared prosperity. The book caused a stir and was a guide for many in defining what an extractive regime is, led by a state that exploits natural, unprocessed and export-oriented goods on a large scale. . And then came ‘Power and Progress. A Thousand Years of Struggle between Technology and Prosperity’ (2023), also by Daron, this time accompanied by Simon Johson. This is the thesis that complements the above: Technology and innovation are not in themselves sufficient to achieve prosperity for countries. Technological progress is ambivalent, capable of extracting immense benefits, but also of creating inequalities and gaps for many.

There have been times, for example, at the beginning of the Industrial Revolution, when the owners of the means of production have monopolised all value and impoverished workers. At other times, however, such as during the 20th century, the elites were able to share the wealth generated with civil society, so that the level of wages and living conditions rose, along with an increase in population, creating a productivity bandwagon effect with a consequent redistribution of wealth.

Is technology, primarily AI, a generator of prosperity?

Acemoglu underlines the excessive power of large technology corporations, referring to those that can potentially monopolise platform technologies, and their high power of influence, thanks to their biased ‘visions’ of the future. The author envisions ‘Digital Utopias’ (Move fast and break things) focused on reducing wages and raising labour costs. He therefore proposes the need to create ‘alternatives’ outside of technocracy, where the only aim is to enhance one’s own power, wealth and prestige, going on to explain the danger of an anti-democratic rupture in our countries.

Acemoglu argues that automation, robotisation and the massive use of data are not bad ‘per se’; although he sees dangers in their accumulation and centralisation in a few strong hands, or in their intensive use in ‘surveillance’ use cases (the example of national social scoring). For him, innovative digital technologies should be redirected to complement humans, not replace them, and focused on the following objectives:

  • Improve the productivity of workers in their current jobs.
  • Create new tasks with the help of AI, thereby enhancing human capabilities.
  • Providing the best and most usable information for decision making.
  • Build new platforms that ‘pool’ people with different skills and needs.

He says that ‘humans are not beings who need to consume, but what they want, more than anything else in the world, is to participate’. And within his vision he proposes concrete measures to build counter-powers, mentioning, for example, civil society and the government so that through their governmental policies they carry out initiatives such as:

  • The creation of market incentives on the most socially beneficial technologies, those that generate new tasks or complement human capabilities.
  • Limiting the effective power of certain companies that can take over technologies and block innovation by distorting markets.
  • Reforming taxes so that they favour labour over capital investment and excessive, unchecked automation.
  • Investing in the training and development of workers in pursuit of those advanced skills.
  • Boosting government leadership, not necessarily with excessive regulation.

And finally, but most importantly, prioritise at all times the protection of citizens, especially their privacy. There are many steps to be taken, as can be seen, although I believe that from the EU and thanks to intelligent leadership in regulation, as is the case with the Digital Service Act, the Data Act and the latest in the series, the incipient AI Act, and


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